Background of General Insurance:

The General Insurance Business Nationalization Act was passed in 1972 to

set up the general insurance business. It was the nationalization of 107
insurance companies into one main company called General Insurance
Corporation of India and its four subsidiaries Companies with exclusive
privilege for transacting general insurance business. This act has been
amended and the exclusive privilege ceased on and from the
commencement of the insurance regulatory and development authority
act 1999. General Insurance Corporation has been working as a reinsurer
in India. Their subsidiaries are working as a separate entity and plays
significant role in the public sector of general insurance.
General insurance industry in India was nationalised and a government
company known as General Insurance Corporation of India was formed by
the central government in November, 1972. General insurance companies
have willingly catered to these increasing demands and have offered a
plethora of insurance covers that almost cover anything under the sun.

Objective of the GIC are:

1. To carry on the general insurance business other than life, such as
accident, fire etc.
2. To aid and achieve the subsidiaries to conduct the insurance
business and,
3. To help the conduct of investment strategies of the subsidiaries in
an efficient and productive manner.
Role and Functions of GIC
1. Carrying on of any part of the general insurance, if it thinks it is
desirable to do so.
2. Aiding, assisting and advising the acquiring companies in the matter
of setting up of standards of conduct and sound practice in general
insurance business.
3. Rendering efficient services to policy holders of general insurance.
4. Advising the acquiring companies in the matter of controlling their
expenses including the payment of commission and other expenses.
5. Advising the acquiring companies in the matter of investing their
fund.
6. Issuing directives to the acquiring companies in relation to the
conduct of general insurance business.
7. Issuing directions and encouraging competition among the
acquiring companies in order to render their services more
efficiently.